Young stars of the field

[ZomgRogged]

Per The Economist

 

Pretty interesting read. Great for anyone on break looking for an easy read to get them excited about economics again.

 

I'm ashamed to say I've only heard of Chetty (because of TM) and Roland Fryer (this one comes with a funny story). In high school we watched a tape of kids who were asked who looked scarier between two men. One was Timothy McVeigh and the other was Roland Fryer. Interestingly the kids unanimously picked McVeigh but one boy had the insight to point out "it looks like he's upset about something"

[zshfryoh1]

I am surprised you haven't heard of Jesse Shapiro. He's posted here a few times about RA positions.

Most people have heard of Fryer because of his work with Levitt and his being mentioned in Freakonomics. He is definitely the most well known outside economics on that list.

[igotshoe]

in my opinion, Roland Fryer is the future "big" one from that group.

[Harry Lime]

Those fools misspelled my name. In fact, they got every single letter wrong!

[breakz]

in my opinion, Roland Fryer is the future "big" one from that group.

 

I have my doubts, if only because Fryer works on some sensitive research. Very controversial stuff, even if its thought-provoking.

[mathemagician]

Wow how did Chetty get his PhD in 3 years.

[bscout]

Just for fun, take a look at this.

[99luftballoons]

in my opinion, Roland Fryer is the future "big" one from that group.

 

I don't know. I'm not sure that the 'Steven Levitt generation' of economists will contribute anything significant either within the discipline or outside of it. I'm not wholly confident about the whole Gary Becker approach of taking economic methodology to 'sociological' problems. Then again, I could be wrong.

[igotshoe]

I have my doubts, if only because Fryer works on some sensitive research. Very controversial stuff, even if its thought-provoking.

controversy draws attention, and attention draws money. i should have clarified what i meant by "big," but i was referring to big in the realm of the public, not necessarily a nobel prize winner.

 

i'm a bit biased though as he's one of my personal favorite economists.

[Obsi]

Indeed controversial, won't add much to the discipline imo. But he'll probably be famous and write articles for NY Times. It seems so.

[Harry Lime]

I don't know. I'm not sure that the 'Steven Levitt generation' of economists will contribute anything significant either within the discipline or outside of it. I'm not wholly confident about the whole Gary Becker approach of taking economic methodology to 'sociological' problems. Then again, I could be wrong.

Don't hate the player, hate the game.

[breakz]

controversy draws attention, and attention draws money. i should have clarified what i meant by "big," but i was referring to big in the realm of the public, not necessarily a nobel prize winner.

 

i'm a bit biased though as he's one of my personal favorite economists.

 

He's also one of my favorites, as the controversy doesn't deter him. He's also gone far since finishing at Penn State, which gives me hope too. :p

[pookie bear]

I don't know. I'm not sure that the 'Steven Levitt generation' of economists will contribute anything significant either within the discipline or outside of it. I'm not wholly confident about the whole Gary Becker approach of taking economic methodology to 'sociological' problems. Then again, I could be wrong.

 

Care to elaborate?

 

Fryer seems to be asking really interesting questions that most economists have stayed clear of. He is pushing the boundaries of modern economics. How is that a bad thing?

 

His work has received a lot of attention in the mainstream media so I can understand some of the "old boys" saying that he is pandering or that he has gone "hollywood." But that is the same type of close-minded thinking that led many top economists to miss the impending economic crash. Why should modern economics be limited to answering the same question over and over again, but thinking that changing the model or assumptions will yield some profoundly different answer?

 

Most of modern economic research is completely useless. Who cares if someone is a fantastically clever economist if their work does absolutely nothing to help make the world a better place?

 

Social scientist are a unique set of people. They have the knowledge and tools to make the modern world a more efficient, prosperous, productive, and most importantly a happier place to live in. I'm not naive enough to think any one economist can change the world, but shouldn't we try? Shouldn't economist focus on using our skills to answer important societal questions? Or should they avoid the taboo and only ask the irrelevant questions that get you published in QJE? Does every "good" economist need to write papers that read:

 

Proposition X

Lemma Y

Proof Z

 

or:

 

The labor market response of handicapped carnival workers in south central North Carolina when interest rates drop

 

To me the black-white education gap is an extremely important question for society to answer. Fryer is answering, or at least shedding light on, important questions about how people use limited resources to get what they want. That sounds like a good economist to me.

 

Instead of asking whether Fryer will be the next "big one" in economics, why don't we ask whether this clearly brilliant man can use his skills in economics to help society?

 

If his work can help more minorities pursue education, then I think he has contributed more to society than most economists at top universities.

 

Modern economics needs to stop focusing on being clever and unique and focus more on being useful.

[99luftballoons]

Care to elaborate?

 

Fryer seems to be asking really interesting questions that most economists have stayed clear of. He is pushing the boundaries of modern economics. How is that a bad thing?

 

Sure, I'd love to elaborate. Let's not start some flame war though.

 

Bringing the economic method to questions that are not necessarily in the domain of economics can be construed as exactly the academic imperialism that many other social scientists accuse economists of. Ariel Rubinstein takes an interesting (though hostile) view of the Levitt breed of economists in Freak-Freakonomics.

 

His work has received a lot of attention in the mainstream media so I can understand some of the "old boys" saying that he is pandering or that he has gone "hollywood." But that is the same type of close-minded thinking that led many top economists to miss the impending economic crash.

I agree that the toolset of modern economics needs to be greatly expanded, but I think that this actually backs up my point. It seems a bit early to swagger out into the domain of other disciplines when the house of economics is not in order.

 

Most of modern economic research is completely useless. Who cares if someone is a fantastically clever economist if their work does absolutely nothing to help make the world a better place?

Academic research is not supposed to be immediately applicable, economic theory included. Consider the early 1900's when G.H. Hardy, a famous British number-theorist, declared that he was glad to be in the one field of mathematics that could never ever be applied. Fast forward to today, and indeed the discoveries of centuries of Number Theory are used to prop up the whole RSA cryptography system (which basically allows the internet to work as it does). A similar story can be told about game theory (dismissed as useless, and now a key tool for IO, market design, etc...).

 

Social scientist are a unique set of people. They have the knowledge and tools to make the modern world a more efficient, prosperous, productive, and most importantly a happier place to live in. I'm not naive enough to think any one economist can change the world, but shouldn't we try? Shouldn't economist focus on using our skills to answer important societal questions? Or should they avoid the taboo and only ask the irrelevant questions that get you published in QJE? Does every "good" economist need to write papers that read:

 

Proposition X

Lemma Y

Proof Z

 

or:

 

The labor market response of handicapped carnival workers in south central North Carolina when interest rates drop

 

To me the black-white education gap is an extremely important question for society to answer. Fryer is answering, or at least shedding light on, important questions about how people use limited resources to get what they want. That sounds like a good economist to me.

I completely agree with you. The point of science (social science also) is to develop useful tools to answer interesting and important questions. However, I'm suspicious of any over simplified 'answer' to questions that are by their nature incredibly complicated. That is why I'm very cautious about endorsing the opinion of many applied economists: 'As soon as we incentivize X, the problem will go away!'

 

Instead of asking whether Fryer will be the next "big one" in economics, why don't we ask whether this clearly brilliant man can use his skills in economics to help society?

 

If his work can help more minorities pursue education, then I think he has contributed more to society than most economists at top universities.

 

Modern economics needs to stop focusing on being clever and unique and focus more on being useful.

Again, I agree with the first 2 points (and already posted my opinion on the usefulness of academic research). Like I said, my main problem is not with Fryer himself but with the Levitt generation of economists that try to find problems outside their discipline. There's plenty of stuff inside Economics that needs to be figured out (in the wake of 2008, I'd say market design and institutional design should be a priority!)

 

I'm curious as to what you think of the work being done in behavioral/psychological/neuroeconomics? Clearly that work is 'useless to society', so is that also economists just 'being clever'?

[pookie bear]

Sure, I'd love to elaborate. Let's not start some flame war though.

 

No flame war here. I would hope a group of academics such as ourselves could have an honest discussion where differing viewpoints can be considered without emotions getting the best of us.

 

Bringing the economic method to questions that are not necessarily in the domain of economics can be construed as exactly the academic imperialism that many other social scientists accuse economists of.

 

Are we children trying to guard our academic share of the playground? Other social scientists shouldn't have a monopoly on good ideas. Getting territorial doesn't serve the pursuit of knowledge.

 

Academic research is not supposed to be immediately applicable, economic theory included.

 

I'm not arguing that research have a policy bend to it. However, economics should be the means not the end. The goal isn't to do economics for the sake of doing economics.

 

 

Consider the early 1900's when G.H. Hardy, a famous British number-theorist, declared that he was glad to be in the one field of mathematics that could never ever be applied.

 

You are right, many of todays theories were completely irrelevant at one point.

 

I'm not arguing that we throw out all the irrelevant research that is being done. There are certainly some gems in there just waiting to be discovered and applied in a relevant fashion. However, modern economics is not rewarding useful material.

 

Some of the most interesting and useful papers I have read were published in no name journals because they relied only on OLS or simple theorems. It is a sad day when complex methodology is rewarded more than an interesting conclusion.

 

 

That is why I'm very cautious about endorsing the opinion of many applied economists: 'As soon as we incentivize X, the problem will go away!'

 

No one is saying that we oversimplify a complex problem. But let us not forget that the tools we have to answer questions are just that, tools. Most economists are so caught up flexing their mental muscle that they have forgotten to answer useful questions. The goal is to have an interesting conclusion. Why is economists rewarding those who take the long way to that answer?

 

Simple example:

 

I remember my intermediate micro prof once asked us to show that a Cobb Douglas utility function was homogeneous of degree a+b. Extremely simple. My friend gave a simple one or two line argument. I gave a page and a half where i did all kinds of irrelevant and useless things. I got the high score in the class. My friend got a B. We both made a logically true argument that reached the same conclusion, yet I was rewarded more. I guess I knew how to play the game better than my friend.

 

 

There's plenty of stuff inside Economics that needs to be figured out (in the wake of 2008, I'd say market design and institutional design should be a priority!)

 

I agree there are a lot of things within economics that need to be fixed. I think that proves my point though. Economists have spent so much time doing economics for the sake of it that they have forgotten why we even have the discipline.

 

I'm curious as to what you think of the work being done in behavioral/psychological/neuroeconomics? Clearly that work is 'useless to society', so is that also economists just 'being clever'?

 

I think a lot of the behavioral research into financial markets is going to be very useful in how we model markets in the future and how world markets are restructured. Also, modern economics has become very comfortable with so many assumptions that it makes sense to challenge them.

 

I don't know enough about neuroeconomics to comment on the research being done.

 

To me it seems like economics has lost sight of what it's original purpose was. Let's explain our world with these mathematical tools, rather than sit around and play with math!

 

It seems like Fryer is one of the few economists who has not forgotten why we keep employing economists.

[99luftballoons]

Caveat: My own philosophy of science is very much in line with Thomas Kuhn, so I am not really saying anything original if you find something smart about one of my comments.

 

Are we children trying to guard our academic share of the playground? Other social scientists shouldn't have a monopoly on good ideas. Getting territorial doesn't serve the pursuit of knowledge.

 

This is a mischaracterization of the the complaints behind academic imperialism. Each discipline has a set of problems that it works on, and develops tools to tackle those problems. To think that those same tools would be useful in another discipline is exactly academic imperialism. There is a reason that sociologists/historians/psychologists don't have the word 'a = argmax(u(x))' as every other line in their papers (and it is not, despite the suggestions of some eminent economists, because their fields are 'less sophisticated'). To then suggest that the economic paradigm, that is, the modeling of rational agents and then looking for 'equilibria' can shed light in on questions that it was not developed for... well... that's a big claim, and that is exactly the thing which raises cries of academic imperialism from other fields.

 

(Yes, I'm horribly oversimplifying the way economics does business, but you see what I'm getting at.)

 

I'm not arguing that research have a policy bend to it. However, economics should be the means not the end. The goal isn't to do economics for the sake of doing economics.

 

Well... what exactly is 'economics' then? I spent a summer doing game theory research because I'm interested in game theory for its own sake. I'm very happy that it has many applications, and certainly the problems that drive its development come from outside (as opposed to the problems that drive the development of pure mathematics, for example, which come from inside mathematics itself), but that is not the reason I am interested in doing it.

 

Of course game theory is a different beast... I wouldn't really call it a part of economics, so perhaps it is not a great example. Ariel Rubinstein has a great essay on the place of economic theory called 'Dilemmas of an Economic Theorist', I'd recommend it highly.

 

However, modern economics is not rewarding useful material.

...

Some of the most interesting and useful papers I have read were published in no name journals because they relied only on OLS or simple theorems. It is a sad day when complex methodology is rewarded more than an interesting conclusion.

 

I find it hard to agree with this statement. In my opinion, mechanism design is by far the most practically useful thing that economics has produced in the last 50 years (notice how Google is hiring auction theorists?). Are you saying that mechanism design theorists are not being rewarded?

 

Additionally, I think that any kind of OLS estimation is completely worthless given any complicated data set (we're talking hundreds of variables, massive amounts of data, etc...) and gives absolutely no information or, even worse, wrong information. If OLS was useful as something more than classroom exercises, we could stop the whole field of statistics right now.

 

My main point: If someone answers a difficult question with a simple method, I am incredibly suspicious and would bet they are wrong.

 

No one is saying that we oversimplify a complex problem. But let us not forget that the tools we have to answer questions are just that, tools. Most economists are so caught up flexing their mental muscle that they have forgotten to answer useful questions. The goal is to have an interesting conclusion. Why is economists rewarding those who take the long way to that answer?

 

Simple example:

 

I remember my intermediate micro prof once asked us to show that a Cobb Douglas utility function was homogeneous of degree a+b. Extremely simple. My friend gave a simple one or two line argument. I gave a page and a half where i did all kinds of irrelevant and useless things. I got the high score in the class. My friend got a B. We both made a logically true argument that reached the same conclusion, yet I was rewarded more. I guess I knew how to play the game better than my friend.

 

I'm not sure what this has to do with anything. I don't think one anecdote is evidence of any sort of 'wide-spread' corruption in the field.

 

I think a lot of the behavioral research into financial markets is going to be very useful in how we model markets in the future and how world markets are restructured. Also, modern economics has become very comfortable with so many assumptions that it makes sense to challenge them.

 

I don't know enough about neuroeconomics to comment on the research being done.

 

To me it seems like economics has lost sight of what it's original purpose was. Let's explain our world with these mathematical tools, rather than sit around and play with math!

 

It seems like Fryer is one of the few economists who has not forgotten why we keep employing economists.

 

I see the point of 'playing around with math' a bit like stress testing. When car manufacturers design a family sedan, they have experienced racecar drivers drive it around racetracks and beat the hell out of it as if it were a race car. Will this car ever see such conditions in the real world? No. But, does this help to design a better real world car? Obviously yes.

 

Economics has a set of mathematical tools that they can use to go at problems. Is there a reason that people analyze the 'problem of existence of competetive equilibrium in only-slightly-kinda-convex economies with super-additive-but-only-until-t=5 preferences'? Yes, to see how the tools behave in the really extreme environments that they would never be applied to.

[pookie bear]

To then suggest that the economic paradigm, that is, the modeling of rational agents and then looking for 'equilibria' can shed light in on questions that it was not developed for... well... that's a big claim, and that is exactly the thing which raises cries of academic imperialism from other fields.

 

Truth can withstand any amount of scrutiny. If economic theories can shed light on a question, then why should we let it hide in the dark?

 

I find it hard to agree with this statement. In my opinion, mechanism design is by far the most practically useful thing that economics has produced in the last 50 years (notice how Google is hiring auction theorists?). Are you saying that mechanism design theorists are not being rewarded?

 

I see a straw man developing here. I'm not saying that economics has become irrelevant or we are somehow arguing ourselves in circles for no apparent reason.

 

The incentives for academics are clear, publish or perish. To me it seems like the publication process favors complex methodology over interesting conclusions. This creates perverse incentives for professors that I feel are leading the profession down the wrong path.

 

Are we so absorbed in the field that we have forgotten our Intro Econ class?

Economics is just the study of how people use scarce resources to get what they want. Everything else that we have been taught, all the theories, all the math, all the stats, these are just tools to answer the above question. These are the means, not the end.

 

Many of the top economists get this point. I think Fryer is one of them.

[pookie bear]

Additionally, I think that any kind of OLS estimation is completely worthless given any complicated data set to.

 

Agreed. But not every interesting conclusion has to follow from a complicated data set.

[pookie bear]

I'm not sure what this has to do with anything. I don't think one anecdote is evidence of any sort of 'wide-spread' corruption in the field.

 

No. But it is not surprising is it?

[Oikos-nomos]

My main point: If someone answers a difficult question with a simple method, I am incredibly suspicious and would bet they are wrong.

 

It was Einstein who said everything should be made as simple as possible, but no simpler. Some economists in the profession know this and they advice against complicating things unnecessarily, because it only shades the truth.

 

Take for instance the paper of Akerlof 'Market for Lemons', Spence's paper about signaling in education (so true for Grad Econ applicants, especially for internationals), and the work of Krugman and Stiglitz. They all consist in cute little models with simple math, but they tell things that many complicated theorems can't tell.

 

I'm not against rigour, in fact I love it. But I think the worst thing a scientist can do is to complicate things unnecessarily, therefore obscuring the truth, whether if it is to show off or to hide his little grasp of the problem's key point.

[chestnut.cc]

While Rubinstein is a tad too acerbic in his critique, fundamentally I agree with him. Would you think you can comment on string theory just because you read a popular physics book? Popular economics is a dangerous trend because as Rubinstein says, a lot of economists exist to justify viewpoints. Simplicity doesnt mean easy comprehensibility, it means elegance and aesthetic. Continuity in classical calculus is a messy thing, what with tonnes of epsilon delta manipulations and all the vagaries of the real line. Topology, on the other hand, is beautiful. It isn't simple at first glance, epsilon delta arguements are more 'intuitive'. But on deeper study, it is beautifully simple. This is what theory is about, and Rubinstein is as deep a theorist as youll get. When Einstein says simplify he means Einstein simplify. Do not take these words at face value. Applied work is tremendously important, but it cannot be the face of economics. There is no reason to think that a theory of human society and a theory of gravity vary vastly in their tractability, its just that one thinks that one ought to be simple and the other complex.

[99luftballoons]

It was Einstein who said everything should be made as simple as possible, but no simpler. Some economists in the profession know this and they advice against complicating things unnecessarily, because it only shades the truth.

 

Take for instance the paper of Akerlof 'Market for Lemons', Spence's paper about signaling in education (so true for Grad Econ applicants, especially for internationals), and the work of Krugman and Stiglitz. They all consist in cute little models with simple math, but they tell things that many complicated theorems can't tell.

 

I'm not against rigour, in fact I love it. But I think the worst thing a scientist can do is to complicate things unnecessarily, therefore obscuring the truth, whether if it is to show off or to hide his little grasp of the problem's key point.

 

Simple models to act as 'fables' to inform us how certain markets work is much different from doing research involving data and trying to actually quantify the effects of a treatment. For the former, simplicity is the key to success. For the latter, simple might mean simplistic.